Ghost town with Dh2.5bn price tag

Nine months after Khoie Properties announced it would "immediately" start work on the long-delayed Dh2.5 billion ($680.6 million) La Hoya Bay development in Ras al Khaimah, investors in the project say they see no signs of progress.

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Back to business

Many of the 700 or so people who bought prospective units on the man-made Al Marjan Island are sceptical about whether the development will ever be built.

"The place has been a ghost town for three years," said one of several investors who spoke to The National. "It's just an utter nightmare."

But Peter Riddoch, the new chief executive at Khoie Properties, says the company remains committed. He says that since joining in December, he has negotiated an extension with the Ras al Khaimah Investment Authority (Rakia) on options on the parcels of land it does not own outright.

"We continue to work to finalise the funding requirements to allow us to recommence the project," said Mr Riddoch, the former chief executive of Damac Properties, one of Dubai's largest property developers. "I am totally committed to finding a solution to moving the project on."

La Hoya Bay is one of the flagship developments in Ras al Khaimah. Plans call for more than 1,400 residential units, a 279-room hotel, retail space and marinas.

More than 900 units were sold off-plan during the height of the property boom. But there has been little work done in recent years.

Frank Khoie, the company founder, was sentenced to three years in jail in 2009 for bouncing a Dh57m cheque to Rakia. He eventually served 11 months.

Since emerging from jail last May, Mr Khoie has consistently maintained the project will go forward. In October he told investors the "paperwork is done".

Mr Khoie declined to comment for this article.

But Mr Riddoch acknowledged the company was still seeking about Dh900m in financing to cover construction costs and the purchase of the majority of land, which is still owned by Rakia.

Khoie Properties owns title to about 330,000 square feet of the 1.5 million sq ft project and controls the rest through options on the land with Rakia, Mr Riddoch said.

He said although construction remained stalled, there were positive signs. But many investors remain unconvinced.

"I don't think any investor can put their hand on the heart and say they've seen any likelihood of movement," said Neil Pattison, who paid about Dh1m for a villa in 2008.

kbrass@thenational.ae